Kenya Dominates East Africa’s Remittance Landscape with $4.8 Billion in 2024
Kenya has cemented its position as East Africa’s leader in diaspora remittances, receiving an extraordinary $4.8 billion (Sh537.6 billion) in 2024, according to the World Bank. This achievement outpaces other countries in the region, showcasing Kenya’s prominence in attracting financial inflows from its diaspora community.
Regional Comparison
Somalia and Uganda follow Kenya with remittances of $1.73 billion (Sh223.8 billion) and $1.49 billion (Sh192.5 billion), respectively. However, other East African nations like the Democratic Republic of Congo (DRC) and South Sudan experienced notable declines, with DRC receiving $1.35 billion (Sh174.7 billion) and South Sudan $1.14 billion (Sh147.4 billion).
In contrast, Tanzania, Rwanda, and Burundi continue to lag, with remittance inflows remaining under $1 billion. Tanzania, in particular, recorded $757 million (Sh97.8 billion), the lowest in the region.
Remittances: A Growing Global Force
The World Bank highlights a global shift, where remittances have overtaken Foreign Direct Investments (FDIs) as a primary source of financial support for low- and middle-income countries over the last decade.
In East Africa, the impact of remittances on GDP varies significantly. South Sudan and Somalia rely heavily on these inflows, which account for 17.5% and 13.6% of their GDPs, respectively. In Kenya, remittances contribute 4.6% to GDP, reflecting steady growth from just $51 million (Sh6.6 billion) in 2001.
Rwanda, with a remittance-to-GDP ratio of 3.9%, has seen an uptick in inflows, while Uganda’s ratio stands at 2.6%. On the other hand, DRC, Tanzania, and Burundi report ratios below 2%, underlining their minimal reliance on diaspora contributions.
Insights Across Africa
On the African continent, Egypt remains the frontrunner in remittances, bringing in $22.65 billion (Sh2.9 trillion), followed by Nigeria at $19.84 billion (Sh2.6 trillion) and Morocco at $12.05 billion (Sh1.6 trillion).
Challenges and Policy Implications
Some East African countries face hurdles in maximizing remittance potential. For example, Tanzania’s reluctance to adopt dual citizenship has been a barrier to attracting higher diaspora inflows. While the Tanzanian government proposed a bill in 2024 to grant “special status” to citizens abroad, the legislation remains under consideration.
Uganda, however, has steadily grown its remittance inflows, reaching $1.49 billion in 2024, up from $238 million in 2000. In contrast, DRC has seen a sharp decline from its 2022 peak of $3.26 billion, now standing at $1.35 billion.
A Financial Lifeline
As remittances continue to outpace FDIs in several countries, their importance as a stable financial source becomes increasingly evident. Kenya’s strong performance underscores the significant role diaspora communities play in supporting economic growth, serving as a model for its regional counterparts to follow.
